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More money doesn't buy you more happiness
by Matthew - Monday, 6 December 2010, 10:08 AM
A new study by Daniel Kahneman (2002 Nobel Prize in Economics) and Angus Deaton (Princeton University in the US) has found that above a threshold of $75,000 per year (which is about £48,500), earning more money does not buy any more happiness.

The new study was published in the high profile Proceedings of the National of the Academy of Science (PNAS) in August this year. The authors analysed over 450,000 responses to a Gallup Wellbeing survey in the US that asks respondents about different aspects of their life circumstances and wellbeing.

The survey contains questions on education level, marital status, health conditions, income level and two measures of 'happiness'.

The first happiness measure, emotional well-being, was defined by the authors as the 'emotional quality of an individual's everyday experience'; this provides a measure of the frequency and intensity of peoples positive and negative emotions such as joy, stress, sadness, anger, and affection.

The second 'happiness measure' was described as 'life evaluation', which provides an evaluation of how satisfied people are with their lives in general. Emotional well-being is a short-term measure of happiness whereas life evaluation provides a longer-term evaluation of happiness.

Not surprisingly, low income is associated both with low emotional well-being and low life evaluation. Increasing your income does have a positive impact on wellbeing but only up to a certain point. For US households with an income greater than $75,000, 'life evaluation' scores did rise, but 'emotional well-being' did not. This means that above a stable income of $75,000, the daily happiness and quality of life of people in the US has less to do with money than it has to do with life circumstances, such as marital status, education level, and health conditions.

The authors conclude: "More money does not necessarily buy more happiness, but less money is associated with emotional pain."

(Edited by Philip - original submission Thursday, 11 November 2010, 01:12 PM)

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